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composed of a large number of small and medium sized companies
fragmented industry
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establish networks of linked merchandising outlets that are interconnected by IT and function as one large company
chaining strategy
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the parent company grants to someone the rights to use the parent's name, reputation, and business model in a particular location or area in return for a sizable fee and often a percentage of the profits
franchising
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people who are delighted by being the first to purchase and experiment with a product based on a new technology, even though it is imperfect and expensive
innovators
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they understand that the technology may have important future applications and are willing to experiment with it to see if they can pioneer uses for it
early adopters
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forms the leading wave or edge of the mass market, and their entry into the market signifies the beginning of the growth stage
early majority
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the customers who purchase a new technology or product only when it is obvious it has great utility and is here to stay
late majority
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inherently conservative and distrustful of new technology, frequently refuse to adopt even when beneftis are obvious or unless they are forced to do so
laggards
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gulf that companies must cross between innovators and the early majority, that is, between the embryonic market and the rapidly growing mass market
competitive chasm
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the rate at which the industry's product is bought by customers in that marekt
growth rate
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the degree to which a new product is perceived as better at satisfying customer needs than the product it supersedes
relative advantage
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the degree to which a new product is perceived as being consistent with the current needs or existing values of potential adopeters
compatibility
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the degree to which a new product is perceived as difficult to understand and use
complexity
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the degree to which potential customers can experiment with a new product on a hands-on trial basis
trialability
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the degree to which the results of using and enjoying a new product can be seen and appreciated by other people
observability
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determines the amount and type of resources and capital that must be spent to configure a company's value chain so that it can pursue a business model successfully over time
invesetment strategy
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build market share by developing a stable and distinct competitive advantage to attract customers who have no knowledge of the company's products
share-building strategy
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the goal is to maintain its relative competitive position in a rapidly expanding market and, if possible, to increase it
growth strategy
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seeking to specialize in some way and adopt a focus business model to reduce their investment needs
market concentration
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maintain and increase market share by attracting customers from weak companies exiting the market
share-increasing strategy
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limiting or decreasing its investment in a business and extracing or milking its investment as much as it can
harvest strategy
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expand resources to develop their distinctive competency so as to remain market leaders
hold-and-maintain strategy
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strategy of "filling the niches," or catering ot the needs of customers in all market segmetns to deter entry
product proliferation
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lower prices every time a new company enters the industry or contemplating entering the industry, and then raises prices when threat is gone
price cutting
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the process by which companies increase or decrease product prices to convey their intentions to other companies and so influence the way they price their products
price signaling
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strategy in which a company does exactly what its rivals do
tit-for-tat strategy
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one company assumes the responsibility for setting the pricing option that maximizes industry profitability
price leadership
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expanding market share in its existing product markets
market penetration
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the creation of new or improved products to replace existing one
product development
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finds new market segments for a company's products
market development
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aims at growing in a declinging industry by picking up the market share of companies that are leaving in industry
leadership strategy
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focuses on pockets of demand that are declining more slowly than the industry as a whole
niche strategy
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company sells off the business to others
divestment strategy
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The principle forms of competitive strategy in a fragmented industry are...
- chaining
- franchising
- horizontal merger
- using the Internet
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The principle strategies used by companies in mature industries to deter entry are...
- product proliferation
- price cutting
- maintaining excess capacity
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The principle strategies used by companies in mature industries to manage rivalry are...
- price signaling
- price leadership
- nonprice competition
- capacity control
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What are the 4 main strategies a company can pursue when demand is failing?
- leadership
- niche
- harvest
- divestment
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